Probe panel finds massive manipulation at Bangla stock market

DHAKA: A high-powered committee investigating the debacle at Bangladesh's bourse early this year has found heavy manipulation in the stock market and has blamed the market regulator for failing to oversee the situation.

Constituted 10 weeks back, the three-member panel has made a series of recommendations for a major overhaul of the regulatory Securities and Exchange Commission (SEC), including the replacement of its current chairman.

"All the institutions that have anything to do with the stock market were responsible for the debacle," former central banker Khondkar Ibrahim Khaled, who led the committee, told newsmen after submitting the report to finance minister AMA Muhith.

He added that bad decisions and failure to oversee the situation by the SEC was largely responsible for the debacle.

Briefing the newsmen later at his office, Muhith said the inquiry report would be made public in 10 to 12 days but initially no name of individuals would be published as the probe committee "did not get enough time to go into the details".

The minister, however, acknowledged that the committee named some people after getting "some indications" about their role in creating the crisis.

"I don't want to make individuals' names public without being sure of it... If I am convinced about the sustainability of the allegations made in the report, I will publish it," he said.

He said the committee pointed out 15 case studies showing how the market was "heavily manipulated" by some people who took illegal advantage using their relations with influential quarters in the government.

"But I don't think there was any political role behind the market debacle," he said.

The former Bangladesh Bank deputy governor and currently the chairman of the state-owned Krishi Bank, Khaled said, said they did not find the total figure but have identified that some money has gone to private pockets.

But he estimated around Tk 4,000 to 5,000 crore to be going to private pockets through direct listing.

Bangladesh's stock market was closed for several days in December 2010 and January 2011 for crashes that caused fund losses of millions of small investors as the benchmark Dhaka Stock Exchange general index (DGEN) fell nearly 1,800 points.